Delta Air Lines will return more than $1 billion to shareholders over the next three years, the company told investors Wednesday.
The Atlanta-based carrier said it will accomplish the return by initiating a 6 cent-per-share dividend for shareholders of record as of Aug. 9, 2013. The dividend will be paid Sept. 10. The airline’s board of directors also has authorized a $500 million share repurchase program that will be completed no later than June 30, 2016. Such repurchases can increase earnings per share and boost the market value of remaining shares.
The announcement was part of the unveiling of a five-year financial plan. Delta said it will reinvest $2 billion to $2.5 billion annually over the period, or about 50 percent of its operating cash flow, to improve the company’s fleet, facilities, products and technology. The company also plans to make up to $1 billion in incremental contributions to its pension plans, in addition to the $650 million to $700 million annual required minimum contribution.
Delta said the five-year plan is aimed at creating up to $5 billion of value for shareholders. The carrier’s shares closed Wednesday at $18.66, up 58 cents, or 3 percent.
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